In the latest development to the FTX saga, the former director of engineering at the defunct cryptocurrency exchange entered a guilty plea to criminal charges on Tuesday (Feb. 28).
Nishad Singh also agreed to cooperate with the ongoing investigation into FTX co-founder Sam Bankman-Fried’s activities, admitting that he knew by the middle of last year that SBF was using customer funds without their knowledge, among other irregularities.
An SEC press release issued Tuesday (Feb. 28) said, “According to the SEC’s complaint, Singh created software code that allowed FTX customer funds to be diverted to Alameda Research, a crypto hedge fund owned by Bankman-Fried and [co-founder Gary] Wang, despite false assurances by Bankman-Fried to investors that FTX was a safe crypto asset trading platform with sophisticated risk mitigation measures to protect customer assets and that Alameda was just another customer with no special privileges. The complaint alleges that Singh knew or should have known that such statements were false and misleading.”
Related: FTX Exec Singh Set to Plead Guilty To Fraud
In a Tuesday announcement, the Commodities Futures Trading Commission (CFTC) also charged Singh with fraud, saying “Singh was responsible for creating or maintaining various undisclosed components in the code underlying FTX that, operating together with other features, granted Alameda functionalities that allowed it to misappropriate FTX customer assets. Among other things, these features in the FTX code favored Alameda and allowed it to execute transactions even when it did not have sufficient funds available, including, critically, a ‘can withdraw below borrow’ functionality that allowed Alameda to withdraw billions of dollars in customer assets from FTX.”
As reported by Reuters, “Singh, 27, pleaded guilty to one count of wire fraud, three counts of conspiracy to commit fraud, one count of conspiracy to commit money laundering, and one count of conspiracy to defraud the United States by violating campaign finance laws.”
